TransCanada applies Keystone's lessons to Energy East pipeline

CALGARY, Alberta, April 7 (Reuters) - After six years
battling bitter opposition to its Keystone XL pipeline project
in the United States, TransCanada Corp has learned
where and when to pick its fights.

Canada's No. 2 pipeline company scrapped plans last week to
build a crude oil export terminal in Quebec because it would
endanger beluga whales in the St. Lawrence River.

The proposed Cacouna terminal was part of TransCanada's 1.1
million barrel-per-day Energy East plan for a pipeline to take
Alberta oil sands crude to Canada's east coast. The project will
now be delayed roughly two years as TransCanada rejigs
regulatory filings.

Despite the drop in global crude prices, demand for Energy
East remains strong with Canadian crude production seen hitting
6.4 million barrels per day by 2030, up from 3.5 million bpd in
2014.

With Cacouna's cancellation, environmentalists claimed a
huge victory, but industry players say TransCanada is shrewdly
taking a short-term hit in hope of a smoother road ahead.

Besides beluga whales, Energy East was facing other hurdles
in Quebec. The province has imposed seven conditions on the
pipeline and aboriginal groups are resisting it.

"This avoids having it slowed down a lot more. They really
would have had an enormous problem trying to get permission to
build in Quebec," said environmental law specialist Dianne Saxe.
"My guess is they decided it would be a better economic decision
not to stand and fall on this particular hill."

Alan Ross, partner at law firm Borden Ladner Gervais, said
scrapping Cacouna will likely speed up the National Energy Board
regulatory process.
Continued...